Amazon may be mulling a rival to YouTube

By Jonathan Berr

December 20, 2017 / 5:45 AM
/ MoneyWatch

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Is Amazon (AMZN) considering creating a rival to YouTube? Given a spat it's having with the website's corporate parent Alphabet (GOOG), it just might be. And some recent trademark filings from Amazon are heightening speculation that Amazon could dive into yet another industry.

Earlier this month, the e-commerce and streaming video giant filed for trademarks with the US Patent and Trademark Office for the terms "Amazon Tube" and "Open Tube" that describe a service that bears a strong resemblance to YouTube.

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Google, also owned by Alphabet, said it has been trying to reach an agreement with Amazon to give consumers access to each other's products and services but has been stymied by a lack of cooperation from the Seattle-based company.

"… Amazon doesn't carry Google products like Chromecast and Google Home, doesn't make Prime Video available for Chromecast users, and last month stopped selling some of Nest's latest products," according to a YouTube spokesperson. "Given this lack of reciprocity, we are no longer supporting YouTube on Echo Show and FireTV. We hope we can reach an agreement to resolve these issues soon."

YouTube declined to elaborate further, and Amazon didn't respond to a request for comment for this story.

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According to blogger Philip Swann, who broke the trademark filing story on his website The TV Answerman, the Amazon applications appeared the same day that Google warned consumers who use the YouTube app on Fire TV devices that it would remove the app effective Jan. 1. Both companies have said they're trying to resolve their disagreement before the end of the year. However, Amazon has yet to put Google's Chromecast on its site as it promised to do last week, according to Swann.

Taking on YouTube would be a tall order even for Amazon, which has disrupted markets both large and small since its founding more than two decades ago given its willingness to sacrifice profit for revenue growth. That strategy has been easier to execute in recent years, thanks to the success of its Amazon Web Services cloud-computing business.

YouTube is one of the most popular websites on the Internet. According to the site, which Google acquired for $1.65 billion in 2006, it attracts more viewers aged 18 to 34 and 18 to 49, both overall and on mobile devices, than any US cable network. People watch a billion hours of YouTube video every day, generating billions of views.

"[A]nything Amazon does should concern the leader," wrote Michael Pachter, an analyst with Wedbush Securities (which rates Amazon as "outperform") in an email. "However, YouTube has a pretty large base of users, so unlikely that an Amazon entry does much more than whittle away at market share. It's highly unlikely that an Amazon video service will ever displace YouTube."

Amazon, though, has a knack for doing the unexpected, ranging from producing award-winning original TV shows and movies to buying the upmarket grocery chain Whole Foods, always with an eye toward disrupting an entire industry.